Appraisals for Higher-Priced Mortgage Loans Exemption Threshold

Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83311 associated with this final rule will be limited to administrative costs to analyze applicability of the rule and compliance and validation testing to determine the presence of detectable modified genetic material in affected products. As with beet sugar, it is unlikely that refined sugarcane would contain detectable levels of modified genetic material. As a result, regulated entities may not have additional labeling costs due to the addition of ‘‘sugarcane (Bt insect-resistant varieties)’’ to the List. Food manufacturers whose products contain summer squash and retailers that sell uncooked summer squash will see no change in costs as the amendment to the List would reduce the varieties of squash that are presumed to be a BE food. Food manufacturers whose products contain summer squash and retailers that sell uncooked summer squash are already maintaining records or labeling relevant products in accordance with the Standard. Food manufacturers that use summer squash are likely concentrated in Fruit and Vegetable Preserving and Specialty Food Manufacturing (The North American Industry Classification System (NAICS) 3114). This industry sector had 1,540 firms listed in the 2017 Statistics of US Businesses. Of these, approximately 1,475 would be classified as small. Additionally, 904 firms would be classified as very small food manufacturers by the Standard and are therefore exempt. Food manufacturers already face the administrative costs associated with using a product on the List. The final rule would make it easier for regulated entities, who are already maintaining records in compliance with the Standard, to demonstrate that labeling is not required if they know they are not receiving BE varieties. Costs to small food manufacturers using summer squash therefore will remain unchanged by this proposal. Retailers will not see a change in the number of labels required as a result of the change in the modifier of summer squash or by the addition of sugarcane. Summer squash that meets the requirement for disclosure under the 2018 BE final rule will also meet the requirement for disclosure under this amendment. The same number of labels are required under the two rules. Therefore, the cost to retailers will remain unchanged. Therefore, the costs to each of the three affected industry sectors would not be significant. For these reasons, AMS is certifying that this rule to add ‘‘sugarcane (Bt insect￾resistant varieties)’’ to the List and limiting the varieties of squash listed as BE foods to ‘‘summer, coat protein￾mediated virus-resistant varieties’’ will not have a significant economic impact on a substantial number of small entities. F. Executive Order 12988 This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. The final rule is not intended to have retroactive effect. All labeling claims made in conjunction with this regulation must be consistent with other applicable Federal requirements. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this rule. G. Congressional Review Act Pursuant to Subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (the Congressional Review Act), the Office of Information and Regulatory Affairs has determined that this action does not meet the criteria set forth in 5 U.S.C. 804(2). List of Subjects in 7 CFR Part 66 Agricultural commodities, Food labeling, Reporting and recordkeeping requirements. For the reasons stated in the preamble, the Agricultural Marketing Service amends 7 CFR part 66 as set forth below: PART 66—NATIONAL BIOENGINEERED FOOD DISCLOSURE STANDARD ■ 1. The authority citation for part 66 continues to read as follows: Authority: 7 U.S.C. 1621 et seq. ■ 2. Revise § 66.6 to read as follows: § 66.6 List of bioengineered foods. The List of Bioengineered Foods consists of the following: Alfalfa, apple (ArcticTM varieties), canola, corn, cotton, eggplant (BARI Bt Begun varieties), papaya (ringspot virus￾resistant varieties), pineapple (pink flesh varieties), potato, salmon (AquAdvantage®), soybean, squash (summer, coat protein-mediated virus￾resistant varieties), sugarbeet, and sugarcane (Bt insect-resistant varieties). Erin Morris, Associate Administrator, Agricultural Marketing Service. [FR Doc. 2023–26059 Filed 11–28–23; 8:45 am] BILLING CODE P DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency 12 CFR Part 34 [Docket No. OCC–2023–0012] RIN 1557–AF23 FEDERAL RESERVE SYSTEM 12 CFR Part 226 [Docket No. R–1819] RIN 7100–AG19 CONSUMER FINANCIAL PROTECTION BUREAU 12 CFR Part 1026 Appraisals for Higher-Priced Mortgage Loans Exemption Threshold AGENCY: Office of the Comptroller of the Currency, Treasury (OCC); Board of Governors of the Federal Reserve System (Board); and Consumer Financial Protection Bureau (Bureau). ACTION: Final rules, official interpretations, and commentary. SUMMARY: The OCC, the Board, and the Bureau are finalizing amendments to the official interpretations for their regulations that implement section 129H of the Truth in Lending Act (TILA). Section 129H of TILA establishes special appraisal requirements for ‘‘higher-risk mortgages,’’ termed ‘‘higher-priced mortgage loans’’ or ‘‘HPMLs’’ in the agencies’ regulations. The OCC, the Board, the Bureau, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), and the Federal Housing Finance Agency (FHFA) (collectively, the Agencies) jointly issued final rules implementing these requirements, effective January 18, 2014. The Agencies’ rules exempted, among other loan types, transactions of $25,000 or less, and required that this loan amount be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W). If there is no annual percentage increase in the CPI–W, the OCC, the Board, and the Bureau will not adjust this exemption threshold from the prior year. Additionally, in years following a year in which the exemption threshold was not adjusted because the CPI–W decreased, the threshold is calculated by applying the annual percentage increase in the CPI–W to the dollar amount that VerDate Sep<11>2014 16:24 Nov 28, 2023 Jkt 262001 PO 00000 Frm 00007 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1 ddrumheller on DSK120RN23PROD with RULES1

83312 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 1Public Law 111–203, section 1471, 124 Stat. 1376, 2185–87 (2010), codified at TILA section 129H, 15 U.S.C. 1639h. 2 78 FR 10368 (Feb. 13, 2013). 3 78 FR 48548 (Aug. 8, 2013). 4 78 FR 78520 (Dec. 26, 2013). 5See NCUA: 12 CFR 722.3; FHFA: 12 CFR part 1222. Although the FDIC adopted the Bureau’s version of the regulation, the FDIC did not issue its own regulation containing a cross-reference to the Bureau’s version. See 78 FR 10368, 10370 (Feb. 13, 2013). 6 12 CFR 34.203(b)(2) (OCC); 12 CFR 226.43(b)(2) (Board); and 12 CFR 1026.35(c)(2)(ii) (Bureau). 7 12 CFR part 34, appendix C to subpart G, comment 203(b)(2)–1 (OCC); 12 CFR part 226, Supplement I, comment 43(b)(2)–1 (Board); and 12 CFR part 1026, Supplement I, comment 35(c)(2)(ii)– 1 (Bureau). 8See 12 CFR part 34, appendix C to subpart G, comment 203(b)(2)–1 and –2 (OCC); 12 CFR part 226, Supplement I, comment 43(b)(2)–1 and –2 (Board); and 12 CFR part 1026, Supplement I, comment 35(c)(2)(ii)–1 and –2 (Bureau). 9See 81 FR 86250 (Nov. 30, 2016). 10The Bureau of Labor Statistics calculates consumer-based indices for each month but does not report those indices until the middle of the following month. As such, the most recently reported indices as of June 1, 2023, were reported on May 10, 2023, and reflect economic conditions in April 2023. would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. Based on the CPI–W in effect as of June 1, 2023, the exemption threshold will increase from $31,000 to $32,400, effective January 1, 2024. DATES: This final rule is effective January 1, 2024. FOR FURTHER INFORMATION CONTACT: OCC: MaryAnn Nash, Counsel, Chief Counsel’s Office, Office of the Comptroller of the Currency, at (202) 649–6287. If you are deaf, hard of hearing, or have a speech disability, please dial 7–1–1 to access telecommunications relay services. Board: Lorna M. Neill, Senior Counsel, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, at (202) 452–3667. For users of TTY–TRS, please call 711 from any telephone, anywhere in the United States. Bureau: Anna Boadwee and Adrien Fernandez, Attorney-Advisors, Office of Regulations, Consumer Financial Protection Bureau, at (202) 435–7700. If you require this document in an alternative electronic format, please contact CFPB_Accessibility@cfpb.gov. SUPPLEMENTARY INFORMATION: I. Background The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) amended TILA to add special appraisal requirements for ‘‘higher-risk mortgages.’’ 1 In January 2013, the Agencies jointly issued a final rule implementing these requirements and adopted the term ‘‘higher-priced mortgage loan’’ (HPML) instead of ‘‘higher-risk mortgage’’ (the January 2013 Final Rule).2 In July 2013, the Agencies proposed additional exemptions from the January 2013 Final Rule.3 In December 2013, the Agencies issued a supplemental final rule with additional exemptions from the January 2013 Final Rule (the December 2013 Supplemental Final Rule).4 Among other exemptions, the Agencies adopted an exemption from the new HPML appraisal rules for transactions of $25,000 or less, to be adjusted annually for inflation. The OCC’s, the Board’s, and the Bureau’s versions of the January 2013 Final Rule and December 2013 Supplemental Final Rule and corresponding official interpretations are substantively identical. The FDIC, NCUA, and FHFA adopted the Bureau’s version of the regulations under the January 2013 Final Rule and December 2013 Supplemental Final Rule.5 The OCC’s, the Board’s, and the Bureau’s regulations,6 and their accompanying interpretations,7 provide that the exemption threshold for smaller loans will be adjusted effective January 1 of each year based on any annual percentage increase in the CPI–W that was in effect on the preceding June 1. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI–W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI–W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. If there is no annual percentage increase in the CPI–W, the OCC, the Board, and the Bureau will not adjust the threshold amounts from the prior year.8 On November 30, 2016, the OCC, the Board, and the Bureau published a final rule in the Federal Register to memorialize the calculation method used by the OCC, the Board, and the Bureau each year to adjust the exemption threshold to ensure that the values for the exemption threshold keep pace with the CPI–W (HPML Small Dollar Adjustment Calculation Rule).9 The HPML Small Dollar Adjustment Calculation Rule memorialized the policy that, if there is no annual percentage increase in the CPI–W, the OCC, the Board, and the Bureau will not adjust the exemption threshold from the prior year. The HPML Small Dollar Adjustment Calculation Rule also provided that, in years following a year in which the exemption threshold was not adjusted because there was a decrease in the CPI–W from the previous year, the threshold is calculated by applying the annual percentage change in the CPI–W to the dollar amount that would have resulted, after rounding, if the decreases and any subsequent increases in the CPI–W had been taken into account. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly; if the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted, after rounding. II. 2024 Adjustment and Commentary Revision Effective January 1, 2024, the exemption threshold amount will increase from $31,000 to $32,400. This amount is based on the CPI–W in effect on June 1, 2023, which was reported on May 10, 2023 (based on April 2023 data).10 The CPI–W is a subset of the CPI–U index (based on all urban consumers) and represents approximately 30 percent of the U.S. population. The CPI–W reported on May 10, 2023, reflects a 4.6 percent increase in the CPI–W from April 2022 to April 2023. Accordingly, the 4.6 percent increase in the CPI–W from April 2022 to April 2023 results in an exemption threshold amount of $32,400, after rounding. The OCC, the Board, and the Bureau are revising the commentaries to their respective regulations to add new comments as follows: • Comment 203(b)(2)–3.xi to 12 CFR part 34, Appendix C to Subpart G (OCC); • Comment 43(b)(2)–3.xi to Supplement I of 12 CFR part 226 (Board); and • Comment 35(c)(2)(ii)–3.xi to Supplement I of 12 CFR part 1026 (Bureau). These new comments state that, from January 1, 2024, through December 31, 2024, the threshold amount is $32,400. These revisions are effective January 1, 2024. III. Regulatory Analysis Administrative Procedure Act Under the Administrative Procedure Act, notice and opportunity for public comment are not required if the agency VerDate Sep<11>2014 16:24 Nov 28, 2023 Jkt 262001 PO 00000 Frm 00008 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1 ddrumheller on DSK120RN23PROD with RULES1

Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83313 11 5 U.S.C. 553(b)(B). 12 5 U.S.C. 603(a), 604(a). 13 44 U.S.C. 3506; 5 CFR part 1320. 14 5 U.S.C. 801 et seq. 15 5 U.S.C. 801(a)(3). 16 5 U.S.C. 804(2). 17Based on data as of February 28, 2023. 18 5 U.S.C. 808(2). finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest.11 The amendments in this rule are technical and apply the method previously memorialized in the December 2013 Supplemental Final Rule and the HPML Small Dollar Adjustment Calculation Rule. For these reasons, the OCC, the Board, and the Bureau have determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendments are adopted in final form. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required.12 As noted previously, the OCC, the Board, and the Bureau have determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly, the RFA’s requirements relating to an initial and final regulatory flexibility analysis do not apply. Paperwork Reduction Act The information collections contained in Regulation Z which implements TILA are approved by OMB under Control number 3170–0015. The current approval for this control number expires on May 31, 2026. In accordance with the Paperwork Reduction Act of 1995,13 the OCC, the Board, and the Bureau reviewed this final rule. The OCC, the Board, and the Bureau have determined that this rule does not create any new information collections or substantially revise any existing collections. Unfunded Mandates Reform Act As a general matter, the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary impact statement before promulgating a rule that includes a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. However, the UMRA does not apply to final rules for which a general notice of proposed rulemaking was not published. See 2 U.S.C. 1532(a). Therefore, because the OCC has found good cause to dispense with notice and comment for this final rule, the OCC has not prepared a budgetary impact statement for the final rule under the UMRA. Bureau Congressional Review Act Statement Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), the Bureau will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to the rule taking effect. The Office of Information and Regulatory Affairs has designated this rule as not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). OCC Congressional Review Act Statement For purposes of the Congressional Review Act, OMB makes a determination as to whether a final rule constitutes a ‘‘major’’ rule.14 If a rule is deemed a ‘‘major rule’’ by OMB, the Congressional Review Act generally provides that the rule may not take effect until at least 60 days following its publication.15 The Congressional Review Act defines a ‘‘major rule’’ as any rule that the Administrator of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies or geographic regions, or (C) significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign￾based enterprises in domestic and export markets.16 The OCC currently supervises approximately 1,060 national banks, federal savings associations, trust companies and federal branches and agencies of foreign banks (collectively, banks).17 Based on the CPI–W in effect as of June 1, 2023, this final rule will increase the exemption threshold from $31,000 to $32,400, effective January 1, 2024. The Office of Information and Regulatory Affairs has designated this rule as not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). For the same reasons set forth above, the OCC is adopting this final rule without the delayed effective date generally prescribed under the Congressional Review Act. The delayed effective date required by the Congressional Review Act does not apply to ‘‘any rule which an agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.’’ 18 In light of the fact that the final rule will have a de minimis impact, delaying the effective date of the final rule is unnecessary. As required by the Congressional Review Act, the OCC will submit the final rule and other appropriate reports to Congress and the Government Accountability Office for review. List of Subjects 12 CFR Part 34 Accounting, Banks, Banking, Consumer protection, Credit, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth-in-lending. 12 CFR Part 226 Advertising, Appraisal, Appraiser, Consumer protection, Credit, Federal Reserve System, Reporting and recordkeeping requirements, Truth in lending. 12 CFR Part 1026 Advertising, Banks, banking, Consumer protection, Credit, Credit unions, Mortgages, National banks, Reporting and recordkeeping requirements, Savings associations, Truth-in-lending. DEPARTMENT OF THE TREASURY Office of the Comptroller of the Currency Authority and Issuance For the reasons set forth in the preamble, the OCC amends 12 CFR part 34 as set forth below: PART 34—REAL ESTATE LENDING AND APPRAISALS ■ 1. The authority citation for part 34 continues to read as follows: Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1462a, 1463, 1464, 1465, 1701j–3, 1828(o), 3331 et seq., 5101 et seq., 5412(b)(2)(B) and 15 U.S.C. 1639h. ■ 2. In Appendix C to Subpart G, under Section 34.203—Appraisals for Higher￾Priced Mortgage Loans, paragraph 34.203(b)(2) is revised to read as follows: Appendix C to Subpart G—OCC Interpretations

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Section 34.203—Appraisals for Higher-Priced Mortgage Loans

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83314 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations Paragraph 34.203(b)(2)

1. Threshold amount. For purposes of § 34.203(b)(2), the threshold amount in effect during a particular period is the amount stated in comment 203(b)(2)–3 for that period. The threshold amount is adjusted effective January 1 of each year by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W) that was in effect on the preceding June 1. Comment 203(b)(2)– 3 will be amended to provide the threshold amount for the upcoming year after the annual percentage change in the CPI–W that was in effect on June 1 becomes available. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI–W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI–W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900.
2. No increase in the CPI–W. If the CPI–W in effect on June 1 does not increase from the CPI–W in effect on June 1 of the previous year, the threshold amount effective the following January 1 through December 31 will not change from the previous year. When this occurs, for the years that follow, the threshold is calculated based on the annual percentage change in the CPI–W applied to the dollar amount that would have resulted, after rounding, if decreases and any subsequent increases in the CPI–W had been taken into account. i. Net increases. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. ii. Net decreases. If the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted.
3. Threshold. For purposes of § 34.203(b)(2), the threshold amount in effect during a particular period is the amount stated below for that period. i. From January 18, 2014, through December 31, 2014, the threshold amount is $25,000. ii. From January 1, 2015, through December 31, 2015, the threshold amount is $25,500. iii. From January 1, 2016, through December 31, 2016, the threshold amount is $25,500. iv. From January 1, 2017, through December 31, 2017, the threshold amount is $25,500. v. From January 1, 2018, through December 31, 2018, the threshold amount is $26,000. vi. From January 1, 2019, through December 31, 2019, the threshold amount is $26,700. vii. From January 1, 2020, through December 31, 2020, the threshold amount is $27,200. viii. From January 1, 2021, through December 31, 2021, the threshold amount is $27,200. ix. From January 1, 2022, through December 31, 2022, the threshold amount is $28,500. x. From January 1, 2023, through December 31, 2023, the threshold amount is $31,000. xi. From January 1, 2024, through December 31, 2024, the threshold amount is $32,400.
4. Qualifying for exemption—in general. A transaction is exempt under § 34.203(b)(2) if the creditor makes an extension of credit at consummation that is equal to or below the threshold amount in effect at the time of consummation.
5. Qualifying for exemption—subsequent changes. A transaction does not meet the condition for an exemption under § 34.203(b)(2) merely because it is used to satisfy and replace an existing exempt loan unless the amount of the new extension of credit is equal to or less than the applicable threshold amount. For example, assume a closed-end loan that qualified for a § 34.203(b)(2) exemption at consummation in year one is refinanced in year ten and that the new loan amount is greater than the threshold amount in effect in year ten. In these circumstances, the creditor must comply with all of the applicable requirements of § 34.203 with respect to the year ten transaction if the original loan is satisfied and replaced by the new loan unless another exemption from the requirements of § 34.203 applies. See § 34.203(b) and (d)(7).

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BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Authority and Issuance For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below: PART 226—TRUTH IN LENDING (REGULATION Z) ■ 3. The authority citation for part 226 continues to read as follows: Authority: 12 U.S.C. 3806; 15 U.S.C. 1604, 1637(c)(5), 1639(l), and 1639h; Pub. L. 111– 24, section 2, 123 Stat. 1734; Pub. L. 111– 203, 124 Stat. 1376. ■ 4. In Supplement I to part 226, under Section 226.43—Appraisals for Higher￾Risk Mortgage Loans, paragraph 43(b)(2) is revised to read as follows: Supplement I to Part 226—Official Staff Interpretations

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Section 226.43—Appraisals for Higher￾Risk Mortgage Loans

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Paragraph 43(b)(2)

1. Threshold amount. For purposes of § 226.43(b)(2), the threshold amount in effect during a particular period is the amount stated in comment 43(b)(2)–3 for that period. The threshold amount is adjusted effective January 1 of each year by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W) that was in effect on the preceding June 1. Comment 43(b)(2)–3 will be amended to provide the threshold amount for the upcoming year after the annual percentage change in the CPI–W that was in effect on June 1 becomes available. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI–W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI–W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900.
2. No increase in the CPI–W. If the CPI–W in effect on June 1 does not increase from the CPI–W in effect on June 1 of the previous year, the threshold amount effective the following January 1 through December 31 will not change from the previous year. When this occurs, for the years that follow, the threshold is calculated based on the annual percentage change in the CPI–W applied to the dollar amount that would have resulted, after rounding, if decreases and any subsequent increases in the CPI–W had been taken into account. i. Net increases. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. ii. Net decreases. If the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted.
3. Threshold. For purposes of § 226.43(b)(2), the threshold amount in effect during a particular period is the amount stated below for that period. i. From January 18, 2014, through December 31, 2014, the threshold amount is $25,000. ii. From January 1, 2015, through December 31, 2015, the threshold amount is $25,500. iii. From January 1, 2016, through December 31, 2016, the threshold amount is $25,500. iv. From January 1, 2017, through December 31, 2017, the threshold amount is $25,500. v. From January 1, 2018, through December 31, 2018, the threshold amount is $26,000. VerDate Sep<11>2014 16:24 Nov 28, 2023 Jkt 262001 PO 00000 Frm 00010 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1 ddrumheller on DSK120RN23PROD with RULES1

Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 83315 vi. From January 1, 2019, through December 31, 2019, the threshold amount is $26,700. vii. From January 1, 2020, through December 31, 2020, the threshold amount is $27,200. viii. From January 1, 2021, through December 31, 2021, the threshold amount is $27,200. ix. From January 1, 2022, through December 31, 2022, the threshold amount is $28,500. x. From January 1, 2023, through December 31, 2023, the threshold amount is $31,000. xi. From January 1, 2024, through December 31, 2024, the threshold amount is $32,400. 4. Qualifying for exemption—in general. A transaction is exempt under § 226.43(b)(2) if the creditor makes an extension of credit at consummation that is equal to or below the threshold amount in effect at the time of consummation. 5. Qualifying for exemption— subsequent changes. A transaction does not meet the condition for an exemption under § 226.43(b)(2) merely because it is used to satisfy and replace an existing exempt loan unless the amount of the new extension of credit is equal to or less than the applicable threshold amount. For example, assume a closed￾end loan that qualified for a § 226.43(b)(2) exemption at consummation in year one is refinanced in year ten and that the new loan amount is greater than the threshold amount in effect in year ten. In these circumstances, the creditor must comply with all of the applicable requirements of § 226.43 with respect to the year ten transaction if the original loan is satisfied and replaced by the new loan unless another exemption from the requirements of § 226.43 applies. See § 226.43(b) and (d)(7).

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CONSUMER FINANCIAL PROTECTION BUREAU Authority and Issuance For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below: PART 1026—TRUTH IN LENDING (REGULATION Z) ■ 5. The authority citation for part 1026 continues to read as follows: Authority: 12 U.S.C. 2601, 2603–2605, 2607, 2609, 2617, 3353, 5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq. ■ 6. In Supplement I to part 1026, under Section 1026.35—Requirements for Higher-Priced Mortgage Loans, paragraph 35(c)(2)(ii) is revised to read as follows: Supplement I to Part 1026—Official Interpretations

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Section 1026.35—Requirements for Higher-Priced Mortgage Loans

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Paragraph 35(c)(2)(ii)

1. Threshold amount. For purposes of § 1026.35(c)(2)(ii), the threshold amount in effect during a particular period is the amount stated in comment 35(c)(2)(ii)– 3 for that period. The threshold amount is adjusted effective January 1 of each year by any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI–W) that was in effect on the preceding June 1. Comment 35(c)(2)(ii)– 3 will be amended to provide the threshold amount for the upcoming year after the annual percentage change in the CPI–W that was in effect on June 1 becomes available. Any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI–W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI–W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900.
2. No increase in the CPI–W. If the CPI–W in effect on June 1 does not increase from the CPI–W in effect on June 1 of the previous year, the threshold amount effective the following January 1 through December 31 will not change from the previous year. When this occurs, for the years that follow, the threshold is calculated based on the annual percentage change in the CPI–W applied to the dollar amount that would have resulted, after rounding, if decreases and any subsequent increases in the CPI–W had been taken into account. i. Net increases. If the resulting amount calculated, after rounding, is greater than the current threshold, then the threshold effective January 1 the following year will increase accordingly. ii. Net decreases. If the resulting amount calculated, after rounding, is equal to or less than the current threshold, then the threshold effective January 1 the following year will not change, but future increases will be calculated based on the amount that would have resulted.
3. Threshold. For purposes of § 1026.35(c)(2)(ii), the threshold amount in effect during a particular period is the amount stated below for that period. i. From January 18, 2014, through December 31, 2014, the threshold amount is $25,000. ii. From January 1, 2015, through December 31, 2015, the threshold amount is $25,500. iii. From January 1, 2016, through December 31, 2016, the threshold amount is $25,500. iv. From January 1, 2017, through December 31, 2017, the threshold amount is $25,500. v. From January 1, 2018, through December 31, 2018, the threshold amount is $26,000. vi. From January 1, 2019, through December 31, 2019, the threshold amount is $26,700. vii. From January 1, 2020, through December 31, 2020, the threshold amount is $27,200. viii. From January 1, 2021, through December 31, 2021, the threshold amount is $27,200. ix. From January 1, 2022, through December 31, 2022, the threshold amount is $28,500. x. From January 1, 2023, through December 31, 2023, the threshold amount is $31,000. xi. From January 1, 2024, through December 31, 2024, the threshold amount is $32,400.
4. Qualifying for exemption—in general. A transaction is exempt under § 1026.35(c)(2)(ii) if the creditor makes an extension of credit at consummation that is equal to or below the threshold amount in effect at the time of consummation.
5. Qualifying for exemption— subsequent changes. A transaction does not meet the condition for an exemption under § 1026.35(c)(2)(ii) merely because it is used to satisfy and replace an existing exempt loan unless the amount of the new extension of credit is equal to or less than the applicable threshold amount. For example, assume a closed￾end loan that qualified for a § 1026.35(c)(2)(ii) exemption at consummation in year one is refinanced in year ten and that the new loan amount is greater than the threshold amount in effect in year ten. In these circumstances, the creditor must comply with all of the applicable requirements of § 1026.35(c) with respect to the year ten transaction if the original loan is satisfied and replaced by the new loan unless another exemption from the requirements of § 1026.35(c) VerDate Sep<11>2014 16:24 Nov 28, 2023 Jkt 262001 PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1 ddrumheller on DSK120RN23PROD with RULES1

83316 Federal Register / Vol. 88, No. 228 / Wednesday, November 29, 2023 / Rules and Regulations 1The June 30th value for 2022 may differ from the value used in the previous year’s calculation because depository institutions may revise their deposit data to correct for inaccuracies. 2Consistent with Board practice, the low reserve tranche and reserve requirement exemption amounts have been rounded to the nearest $0.1 million. 3The June 30th value for 2022 may differ from the value used in the previous year’s calculation because depository institutions may revise their deposit data to correct for inaccuracies. applies. See § 1026.35(c)(2) and (c)(4)(vii).

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Michael J. Hsu, Acting Comptroller of the Currency. By order of the Board of Governors of the Federal Reserve System, acting through the Secretary of the Board under delegated authority. Michele Taylor Fennell, Deputy Associate Secretary of the Board. Brian Shearer, Senior Advisor, Consumer Financial Protection Bureau. [FR Doc. 2023–25047 Filed 11–28–23; 8:45 am] BILLING CODE 4810–33–P; 6210–01–P; 4810–AM–P FEDERAL RESERVE SYSTEM 12 CFR Part 204 [Regulation D; Docket No. R–1823] RIN 7100–AG71 Reserve Requirements of Depository Institutions AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final rule. SUMMARY: The Board is amending Regulation D, Reserve Requirements of Depository Institutions, to reflect the annual indexing of the reserve requirement exemption amount and the low reserve tranche for 2024. The annual indexation of these amounts is required notwithstanding the Board’s action in March 2020 of setting all reserve requirement ratios to zero. The reserve requirement exemption amount for 2023 will remain $36.1 million, unchanged for 2024, consistent with the Federal Reserve Act (the ‘‘Act’’). The Board is amending Regulation D to set the amount of the low reserve tranche at $644.0 million (decreased from $691.7 million in 2023). The adjustment to the low reserve tranche is derived using a statutory formula specified in the Act. The annual indexation of the reserve requirement exemption amount and low reserve tranche is required by statute but will not affect depository institutions’ reserve requirements, which will remain zero. DATES: Effective date: December 29, 2023. Compliance date: The new low reserve tranche will apply beginning January 1, 2024. FOR FURTHER INFORMATION CONTACT: Benjamin Snodgrass, Senior Counsel (202/263–4877), Legal Division; Kristen Payne, Lead Financial Institution and Policy Analyst (202/452–2872), Division of Monetary Affairs; for users of TTY/ TRS, please call 711 from any telephone, anywhere in the United States, or (202) 263–4869; Board of Governors of the Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. SUPPLEMENTARY INFORMATION: Section 19(b)(2) of the Act (12 U.S.C. 461(b)(2)) requires each depository institution to maintain reserves against its transaction accounts and nonpersonal time deposits, as prescribed by Board regulations, for the purpose of implementing monetary policy. The Board’s actions with respect to this provision are discussed below. I. Reserve Requirements Section 19(b) of the Act authorizes different ranges of reserve requirement ratios depending on the amount of transaction account balances at a depository institution. Section 19(b)(11)(A) of the Act (12 U.S.C. 461(b)(11)(A)) provides that a zero percent reserve requirement ratio shall apply at each depository institution to total reservable liabilities that do not exceed a certain amount, known as the reserve requirement exemption amount. Section 19(b)(11)(B) provides that, before December 31 of each year, the Board shall issue a regulation adjusting the reserve requirement exemption amount for the next calendar year if total reservable liabilities held at all depository institutions increase from one year to the next. The Act requires the percentage increase in the reserve requirement exemption amount to be 80 percent of the percentage increase in total reservable liabilities of all depository institutions over the one-year period that ends on the June 30 prior to the adjustment. No adjustment is made to the reserve requirement exemption amount if total reservable liabilities held at all depository institutions should decrease during the applicable time period. Total reservable liabilities of all depository institutions decreased by 8.6 percent, from $20,841 billion to $19,057 billion, between June 30, 2022, and June 30, 2023.1 Accordingly, the reserve requirement exemption amount for 2024 will remain at $36.1 million, unchanged from its level in 2023.2 Pursuant to Section 19(b)(2) of the Act (12 U.S.C. 461(b)(2)), transaction account balances maintained at each depository institution over the reserve requirement exemption amount and up to a certain amount, known as the low reserve tranche, may be subject to a reserve requirement ratio of not more than 3 percent (and which may be zero). Transaction account balances over the low reserve tranche may be subject to a reserve requirement ratio of not more than 14 percent (and which may be zero). Section 19(b)(2) also provides that, before December 31 of each year, the Board shall issue a regulation adjusting the low reserve tranche for the next calendar year. The Act requires the adjustment in the low reserve tranche to be 80 percent of the percentage increase or decrease in total transaction accounts of all depository institutions over the one-year period that ends on the June 30 prior to the adjustment. Net transaction accounts of all depository institutions decreased 8.6 percent, from $17,549 billion to $16,037 billion, between June 30, 2022, and June 30, 2023.3 Accordingly, the Board is amending Regulation D to set the low reserve tranche for net transaction accounts for 2024 at $644.0 million, a decrease of $47.7 million from 2023. The new low reserve tranche will be effective for all depository institutions beginning January 1, 2024. Effective March 26, 2020, the Board reduced reserve requirement ratios on all net transaction accounts to zero percent, eliminating reserve requirements for all depository institutions. The annual indexation of the reserve requirement exemption amount and the low reserve tranche for 2024 is required by statute but will not affect depository institutions’ reserve requirements, which will remain zero. II. Regulatory Analysis Administrative Procedure Act The provisions of 5 U.S.C. 553(b) relating to notice of proposed rulemaking have not been followed in connection with the adoption of these amendments. The amendments involve expected, ministerial adjustments prescribed by statute and by the Board’s policy concerning reporting practices. The adjustments in the reserve requirement exemption amount and the low reserve tranche serve to reduce regulatory burdens on depository institutions. Accordingly, the Board finds good cause for determining, and so VerDate Sep<11>2014 16:24 Nov 28, 2023 Jkt 262001 PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 E:\FR\FM\29NOR1.SGM 29NOR1 ddrumheller on DSK120RN23PROD with RULES1